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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
.jpg) COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohmatsu, India.
The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5700 kcal/kg on air dried basis in value.
As of now Indonesia is producing around 150 million tons of coal with calorific value below 5700 GAD (according to chairman of Indonesian coal mining association). However by 2014, there are possibilities the total production of below 5700 GAD coal may reach more than 200 million per annum.
Will Indonesian coal export ban impact on the Indian fuel requirements?
The earlier grade of coal that was being considered for proposed ban has GCV of 5100 kcal/kg of less (adb), which can be comparable to 3800-4200 kcal/kg (arb) domestic coal available in India. This grade of coal has found favor in India primarily due to likely price advantage but economics of power generation based on such grade of imported coal may be a suspect. This considering that such grades of coal from Indonesia typically have high moisture content, which makes transportation cost per unit of energy generated higher. The quantum of the low grade of coal (<5100 kcal/kg adb) procured from Indonesia is likely to remain relatively low.
However, if the new definition of low grade coal is applied (<5700 kcal/kg adb), it may be reasonable to believe that such a ban may have impact on the Indian power sector as volumes in this grade of coal are expected to rise in the proportion of coal exports to India. Several of the acquisitions made by Indian power generation companies in Indonesia have been in coal blocks that will produce coal of this grade, and a blanket ban on the exports can jeopardize power plant development in India.
On the other hand, the domestic Indonesian market may not be prepared to consume all the coal mined of this grade in view of the power generation capacity addition plans in Indonesia. In such a case, the coal mine development is likely to be deferred. The Indonesian law makers may need to reconsider domestic market demand, investment climate in coal sector and impact of the legislation on the export revenues.
What is the alternative source for Indian power industry if the proposed coal export ban come into effect by 2014?
Indian power generation companies have been forced to look out for coal assets abroad due to the investment and regulatory environment within the country. India boasts of more than 110 billion tonnes of coal reserves, which largely fall within a 300 meters of depth. If the regulatory and investment environment is amended to allow greater participation of private sector Indian dependence on imports will be reduced.
However, for imports, India will continue to look at Indonesia, South Africa, Australia and newer destinations like Mozambique and Columbia. But these sources also have constraints, domestic demands in South Africa is likely to restrict quantum jump in exports out of South Africa. Indonesia has also proposed domestic market obligations. Mozambique may have infrastructure constraints for large volumes of coal being transported from Tete province to ports of Maputo, Ncala or Beira. Australian coal is of high quality but may have higher costs of mining and transport.
What would be the additional cost if Indian consumers switch their sourcing origin from Indonesia?
Indonesia has competitive advantage due to its geographical closeness. However, on a per tonne basis, assuming comparable quality, costs of transport may make marginal difference when compared with South Africa and Mozambique.
When compared to Australian coal, due to the high quality, cost of energy may well be comparable even though shipping costs are higher. Between Indonesian coal (5500 kcal/kg adb priced at USD 90 per tonne) and Australian coal (6500 kcal/kg adb priced at USD 120 per tonne), indicative variable cost difference of power generation may be about Indian Rupees 0.20 to 0.30 per kWh (electricity unit) in favor of Indonesian coal.
Will it affect Indian economy growth or this coal export ban is ignorable as India can easily identify alternative sources of fuel?
The magnitude of growth in power generation in India will necessarily mean that coal will remain the mainstay. Natural gas has had issues of availability. Nuclear plant development is facing socio-political challenge in view of the risks of technology failure. Development of hydel power has also faced issues of land acquisition, rehabilitation & resettlement apart from the technical issues of hydro-geological features. Renewable sources such as solar and wind generation are still projected to constitute a small portion of India power generation mix. Identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India is a challenge.
What is the Indian government's role on this issue, whether government has to come out with the solution such as easing Indian mining and environment law, open up mining for foreigners, G2G arrangement, etc…?
There is a need to look at domestic sources with pro-active and constructive approach and make all necessary legal and statutory amendments that make the resources available and mineable. Easing the regulations may not be one of such measures but making those regulations work in sync with each other in a time bound and predictable manner must certainly be.
There is certainly a case for opening the domestic coal sector for private participation, including independent miners, and for foreign participation so that newer technology and enhanced scale of operations are implemented in India. The regulation also needs to permit risk capital to come in for prospecting and exploration.
For imports the G2G relations can be leveraged to secure coal assets. India has good relationship with Indonesia and has also signed a tax treaty with Mozambique in 2010 which will facilitate investments. Government may also engage with these countries to ease exports to India and extend fiscal support to coal mining companies investing in mining and associated infrastructure development.
About Dipesh Dipu
Dipesh Dipu works as Director with Deloitte Touche Tohmatsu India Pvt. Ltd in the Energy and Resources consulting practice of the firm and anchors the Firm’s initiative in the mining and metals sectors.
He is a mining engineering graduate from Indian School of Mines and is a Chartered Financial Analyst (CFA). He has also done executive program in business management from Indian Institute of Management Calcutta. Dipesh has recently been awarded the Abheraj Baldota Gold Medal for the Young Mining Engineer of the Year 2007 by the Mining Engineers’ Association of India in recognition of his contributions in the improvement of mining industry in India.
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Tuesday, 31 March 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.43 PCT - XINHUA
China Taiyuan coal transaction price index stood at 132.17 points Monday, down 0.43 percent week on week.
The index, released by Chi ...
Tuesday, 31 March 20
COAL POWER REMAINS IN GLOBAL DECLINE, DESPITE CHINESE SURGE - SYDNEY MORNING HERALD
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CORONAVIRUS - IMPLICATIONS FOR SHIPS AND CREW - GARD
KNOWLEDGE TO ELEVATE
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LAY-UP AND RE-ACTIVATION REVISITED - GARD
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The COVID-19 pandemic has affected the maritime industry in previously unthinkable ways. Ports around the world are denyi ...
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PANAMAX: INDONESIA LACKED VOLUME, PARTLY DUE TO FORCE MAJEURE IN INDIAN PORTS - BALTIC BRIEFING
Capesize
As Covid-19 continued to ratchet up tensions across the globe, the Cape market dealt with the change to remote working. Most regions o ...
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- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- Mercator Lines Limited - India
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- Posco Energy - South Korea
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- Romanian Commodities Exchange
- Bayan Resources Tbk. - Indonesia
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- Tamil Nadu electricity Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chettinad Cement Corporation Ltd - India
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Economic Council, Georgia
- IEA Clean Coal Centre - UK
- SMG Consultants - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Vedanta Resources Plc - India
- Essar Steel Hazira Ltd - India
- Siam City Cement PLC, Thailand
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- The University of Queensland
- Coastal Gujarat Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Holcim Trading Pte Ltd - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Uttam Galva Steels Limited - India
- Gujarat Sidhee Cement - India
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- White Energy Company Limited
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Thiess Contractors Indonesia
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- Globalindo Alam Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Makarim & Taira - Indonesia
- Ambuja Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- Medco Energi Mining Internasional
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- Commonwealth Bank - Australia
- Lanco Infratech Ltd - India
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Kepco SPC Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Energy Link Ltd, New Zealand
- Ministry of Transport, Egypt
- Central Electricity Authority - India
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- GVK Power & Infra Limited - India
- Kumho Petrochemical, South Korea
- Port Waratah Coal Services - Australia
- Price Waterhouse Coopers - Russia
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- Bukit Baiduri Energy - Indonesia
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
- San Jose City I Power Corp, Philippines
- CNBM International Corporation - China
- Petron Corporation, Philippines
- Global Business Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Africa Commodities Group - South Africa
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- Edison Trading Spa - Italy
- Indogreen Group - Indonesia
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Deloitte Consulting - India
- Karbindo Abesyapradhi - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
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